PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) strongly disagrees with the proposed 14.5% hike in the base electricity tariff rate next July as reported recently and is urging the government to have an immediate dialogue with stakeholders on the matter.
The organisation wants the government to keep the industrial tariff rates unchanged so that Malaysia continues to be competitive as well as attractive to foreign investors. “The manufacturing sector is currently facing its toughest time with escalating costs and uncertainties.
“Not only will there be impending increase in operational costs expected in 2025 such as the higher minimum wage and other compliance costs imposed by evolving regulatory requirements, the sector is also bracing for global uncertainties such as geopolitical tensions, persistent supply chain vulnerabilities and shifting trade policies including potential new or higher tariffs enforced by the United States administration,” Tan Sri Soh Thian Lai, president of FMM said in a statement.
FMM added the industrial sector has seen rising cost pressures over the years including higher natural gas prices, higher water and electricity tariffs, not to mention higher logistic charges and information technology costs (e-invoicing).
In 2025, the sector faces fresh cost increases from the higher minimum wage to RM1,700 (from Feb 1) which is projected to add RM10.8bil annually to payroll expenses as well as implementation of the multi-tier levy system.
The mandatory Employees Provident Fund contributions for non-citizen employees would translate into an additional minimum annual payroll cost of RM6.6bil, it noted.
